Total asset of VietinBank is reported at US$48.4 billion, an increase of 15.3% over the last year’s figure, said Le Duc Tho, CEO of VietinBank at the 2017 year-end meeting and mission for 2018.
VietinBank is the second largest bank in Vietnam in term of profit.
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2017 also marks a change in the bank’s major focus of investment toward small and medium enterprises (SMEs) instead of big corporations. Consequently, 53% of the bank’s outstanding loan - VND243 trillion (US$10.6 billion) - has been allocated for SMEs.
In addition to traditional lending activities, total fee earned from the bank’s services witnessed a surge of over 20%, which is equivalent to VND4 trillion (US$175 million). Pre-tax profit generated from subsidiaries and office branches abroad totaled VND560 billion (US$24.6 million), a sharp increase of 39% compared to 2016.
As both the bank’s return on equity (ROE) and return on assets (ROA) reached 12% and 1%, respectively, VietinBank has increased employee’s average wage for an additional of 10%.
In 2018, VietinBank set for an increase of 15 – 17% in total assets, capital mobilization by 18 – 20% and credit growth by 16 – 17%. The bank also aims to keep the bad debt ratio at below 2%.
Currently, Bank of Tokyo-Mitsubishi UFJ is the largest strategic shareholder of VietinBank with 19.73% strategic stake, or equivalent to 734.6 million shares. Meanwhile, IFC Capitalization Equity Fund and International Finance Corporation hold 5.39% and 2.63% shares, respectively. The State Bank of Vietnam (SBV) representing the government in holding state fund of 64.46% shares of VietinBank, or 2.4 billion shares.
Vietnam’s banking sector aims to have credit growth at 17% in 2018, which was the rate achieved in 2017, according to statistics from the SBV.
In 2017, the SBV has flexibly implemented monetary policies to stabilize the financial market, in an effort to control inflation rate and creating conditions for credit institutions to reduce interest rate. As such, with more money is pumped into the national economy, the GDP’s growth rate has reached a 10 year high of 6.81%.
The nation’s foreign exchange reserves reached an all-time high of US$54.5 billion, equivalent to 14-15 weeks’ worth of the following year’s imports. Countries hold foreign-exchange reserves partly to protect themselves against external crises. One common rule of thumb is that reserves that can cover three months' worth of imports are adequate.
More importantly, a high foreign exchange reserve is seen as a significant factor to build up Vietnam’s credibility in the global financial market, the such that the SBV’s governor Le Minh Hung convinced this news will attract more foreign investors coming to Vietnam.
